§ The Secretary of State for Industry (Mr. Eric Varley)
Following his interim report of 4th February on the proposed closures of steelworks by the British Steel Corporation, my right hon. and noble Friend Lord Beswick has now completed his review of the proposed closures in Scotland. His report was made available to Members of the House this morning and will be printed in the Official Report.
The Government have accepted his recommendations.
508 This leaves outstanding only the proposed closures at Shotton, and of the Hartlepool and Consett plate mills.
We have not yet reached a conclusion on Shotton.
In the case of the plate mills my right hon. and noble Friend is awaiting the outcome of discussions between the BSC and the work forces about alternative proposals which would preserve the future of these mills.
The Government accept that the Scottish plants using the obsolescent open-hearth process should close once alternative supplies of steel become available from modern and more efficient plants in Scotland.
Ravenscraig is already being expanded as a bulk producer. The BSC now propose to build electric are plants at Hunterston and at Ravenscraig and to increase the capacity at Hallside. This will bring their capacity in Scotland to 4.2 million tonnes a year, perhaps more, a major step towards their target of 4½ million tonnes a year capacity by the early 1980s.
With the closure of the open-hearth plants there is no alternative to the eventual closure of the Clyde Iron Works and certain primary and product mills. The Clyde Iron Works closure will be no earlier than 1980. But the BSC propose to build at Hunterston two direct reduction units for making iron.
Following the review, BSC now propose to maintain into the 1980s the special steels facility in Scotland represented by the Hallside and Craigneuk mills about which there has been much concern. This will save 1,250 jobs.
BSC propose to develop and expand the Craigneuk steel foundry. For this to be a success the operations at Tollcross will have to be transferred to Craigneuk, but the BSC will give preference to the workers at Tollcross in filling the 300 new jobs at Craigneuk.
The BSC also propose to expand their capacity in Scotland for producing threaded pipe for oil and gas well casing. This latter proposal will give a net gain of 450 jobs.
The previous administration's White Paper of February 1973 on the BSC's 10-year development strategy said there would be a net loss of 6,500 job opportunities in Scotland over the period. The 509 changes I have outlined will cut this figure to 2,100 and some of these are deferred. This is, of course, still serious, given the general employment situation in West Central Scotland, and the Government will strengthen their attack on the industrial and environmental problems there. The Scottish Development Agency will play an important rôle.
The Cambuslang project announced by my hon. Friend the Minister of State at the Scottish Office on 30th June is a good example of the co-operation between the Government, the local authorities and the BSC. A determined effort will be made to attract new industry.
As a result of this review I believe that the Scottish steel industry will be more balanced and eventually emerge stronger and more competitive and so contribute to the British economy.
§ Mr. Heseltine
Does the Secretary of State agree that the paper placed in the Library this morning gives a different impression from that conveyed by his statement in that the number of jobs lost under the proposals is 6,990, of which he has, by his announcement, delayed 1,350 into the 1980's, leaving a net loss of 5,640? Is it not true that he has reached his lower figure of 2,100 by adding in the new jobs in projects which were unquantified in 1973 but which were largely anticipated in that year's White Paper? When does the right hon. Gentleman intend to end the uncertainty about Shotton? Will he tell us the latest estimates of the cost of the review to the British Steel Corporation? Does he realise that the process of this review is having a major damaging effect upon the corporation's modernisation?
§ Mr. Varley
I should have thought that the hon. Member for Henley (Mr. Heseltine) would by now be learning his lesson about jumping to conclusions over statements made to the House. If he is suggesting that my statement is not in accordance with the report by my noble Friend, I must tell him that what I have said is entirely in line with that document. He asked about the cost of the review. My understanding is that no major investment projects have been postponed or put behind time as a result of the review. Of course, we are anxious that the review should be carried through.
510 I should have thought that the hon. Member, who was a member of the previous Conservative Government, would not have complained too much about reviews which have taken place in view of the joint steering group on what my hon. and right hon. Friends called the "constitutional monstrosity" which was set up by the then Secretary of State for Trade and Industry. Shotton is a complicated matter which introduces considerations which involve expansion at Port Talbot, alternative proposals for Shotton, and the social consequences of steel making not being continued at Shotton. We need more time to consider these factors, which are most important.
§ Mr. Dalyell
On behalf of my hon. Friend the Member for Bothwell (Mr. Hamilton) who is inhibited by his office from speaking, may I thank my right hon. Friend for the reply, bearing in mind that the media generally were forecasting 4,000 job losses in Scotland? Is this not a move in the right direction, and will Lord Melchett's promise of two years' notice be honoured in view of the social consequences for Lanarkshire and Ayrshire?
§ Mr. Varley
The assurances to which my hon. Friend referred will be honoured. I thank him for his remarks made on behalf of my hon. Friend who is inhibited from speaking. What he has said is entirely in line with the statement by the chairman of the TUC steel committee this morning. He met my noble Friend and the General Secretary of the Scottish TUC and they praised the depths of the report, welcoming it on behalf of those they represent in Scotland.
§ Mr. David Steel
We on the Liberal bench regard the statement in broad terms as realistic and reasonable. Is the Secretary of State aware that the omission from the statement of any mention of the European Coal and Steel Fund Investment Bank and the regional and social funds is a little surprising? Regardless of the wider decision on devolution, is there not a case now for the Scottish Office setting up a liaison office in Brussels to take full advantage of these funds in the near future? Since it has been one of the scandals of the steel industry that it has been unable to supply piping for the North Sea oil industry, will the right hon. 511 Gentleman explain his reference in the statement to the corporation expanding its capacity in this respect?
§ Mr. Varley
The BSC is very anxious to take advantage of offshore development. The hon. Member will know of its stake in platform construction at Methyl. The casing projects were referred to in my statement. Whether it can get involved in other projects in the North Sea will depend on the outcome of the discussions on the plate mills and developments there. I can assure the hon. Member that the Corporation is taking this matter extremely seriously.
The European Community's involvement is a question for my right hon. Friend the Secretary of State for Scotland. The Scottish Office is well aware of these matters. In the Cambuslang project the European Commission was consulted and was involved.
§ Dr. Bray
Is the Secretary of State aware that this is only the beginning and not the end of the campaign to create a new steel and engineering complex in Scotland? We have accepted that some of our plants are obsolescent, but we want more investment and more jobs. We are getting some, but we need more. We welcome the announcement of new electric are furnaces at Motherwell and Hunterston, the delays to the open-hearth closures, continuation of special steel production in Scotland and the expansion of electric are capacity at Hallside. There are very unusual local employment problems, particularly at Cambuslang, and my right hon. Friend's Department and the Scottish Office will have to make efforts in the constituency of my hon. Friend the Member for Rutherglen (Mr. Mackenzie), who is the Minister of State in my right hon. Friend's Department, if Clydeside is not to have the blackest employment spot in Europe.
§ Mr. Varley
I very much welcome my hon. Friend's earlier comments and I agree with him that we have to make sure that we have an expanding steel industry in Scotland and that it is associated with an expansion of manufacturing jobs. That is what we intend to achieve. I am glad that he mentioned my hon. Friend the Minister of State whose constituency is affected. There are those of us who believe that my hon. 512 Friend has a direct line to the Department and is making representations to us about these matters.
§ Mr. Henderson
Does the Secretary of State not accept that it is time for an end to the sycophancy with which his statement has been greeted? Does he not accept that a redundancy is a redundancy however it may be cloaked and garbed by his statement? Does he agree that the pill he is forcing down the throats of Scottish steel workers is, in spite of its sugar coating, still a bitter one? Does he not accept that we have been acustomed for too long in Scotland to this talk of pie in the sky at Hunterston? Will he give an undertaking that the investment proposals are definitely to go ahead?
§ Mr. Varley
The investment programme is going ahead and has gone ahead. About £200 million has already been committed to modernisation in Scotland. The opportunist attitude of the SNP contrasts very much with the attitude adopted by those who know the Scottish steel industry and who represent its workers—people such as the General Secretary of the Scottish TUC and the chairman of the TUC Steel Committee. I hope that the hon. Member will not go around Scotland misrepresenting what I have said. What we shall have as a result of this statement is an expanding, not a declining steel industry in Scotland.
§ Mr. Small
I am most grateful to the Minister for the way in which he has handled this matter. In view of personal experience of creating a private enterprise steel town at Corby and the redundancies caused in the West of Scotland at that time, I should like to draw my right hon. Friend's attention to the re-engagement of people in the industry and how their chances of re-engagement will be monitored. In the past there has always been a problem concerning the monitoring of someone's right to be re-established. I hope that my right hon. Friend will give an assurance about the month-by-month monitoring of the opportunity for re-engagement of someone who is out of work.
§ Mr. Varley
I agree that there is a great deal of concern about how new jobs are created to give opportunities to those who are displaced in the industry. As my hon. Friend knows, redundancies will take place for a fairly long period in some 513 cases and, of course, the Scottish Development Agency will have a rôle to play. We are very conscious of the points made by my hon. Friend and we have them in mind.
§ Mr. Teddy Taylor
Does the right hon. Gentleman agree that his statement appears to have a harsh effect on the Glasgow area which has one of the highest rates of male unemployment in the country? How many of the lost jobs will be in Glasgow? On investment, does the Minister agree that many of the plans which he has announced today have already been announced several times by Ministers in this Government and, indeed, in the previous Government? If for any reason the investment plans are delayed, will the closures also be delayed?
§ Mr. Varley
Investment will go ahead, and is going ahead, on the basis announced to the House, even though the review was undertaken. I cannot give the hon. Gentleman precise figures about redundancies for Glasgow. We are considering the whole West Central belt of Scotland. I believe that if the hon. Gentleman considers the position of South Glasgow he will realise that in certain areas there is an expansion of jobs and in the others, particularly those mentioned by the hon. Gentleman, there is bound to be a decline. The situation must be viewed in the long term. The Scottish steel industry will expand even though there will be fewer people working in it.
§ Mr. David Watkins
Is my right hon. Friend aware that there will be great concern in my constituency and indeed in the surrounding area because the uncertainty surrounding the Consett plate mill is still not resolved? Will he give us any idea when a decision will be reached about this matter?
§ Mr. Varley
I cannot be precise on that matter, but further discussions are taking place with all the interested parties. I hope to be able to come to a conclusion quickly. I cannot be precise, but I hope that it will be before the end of the year.
§ Sir Anthony Meyer
Is the right hon. Gentleman aware that the deferment once again of a decision on Shotton after so many hopes have been held out and dashed and expectations not fulfilled 514 clearly places a moral obligation on the Government to find a continuing rôle for steel making at Shotton, bearing in mind its magnificent production record, total absence of industrial dispute and the consequences to the area of the loss of 6,000 job opportunities?
§ Mr. Varley
I cannot add much to what I have already said about Shotton. All the factors mentioned by the hon. Gentleman are being taken into consideration. That is the reason we are taking some time to consider the matter. This is a serious matter for the area and we want to get it right.
§ Mr. John Mendelson
Will my right hon. Friend bear in mind that his reference to future expansion of the industry nationwide and in the areas he referred to will, of course, depend upon keeping together a skilled labour force and those people who know and have inherited the knowledge of steel making and who can develop that knowledge? Will he now urge the corporation—giving Government help where needed—to have a policy of stocking steel as is now being proposed in certain parts of South Yorkshire? Will he make available Treasury help to make this policy possible? We do not want the stockholders to have to import large quantities of foreign steel when the upturn comes for British steel.
§ Mr. Varley
I give my hon. Friend the positive assurance that we shall look at the prospects of stocking steel. I do not know whether we can go all the way with my hon. Friend concerning the proposal that he has made not only in the House today but on other occasions. We are trying to see whether help can be given in that direction.
The British Steel Corporation is in a serious position. There has been an unprecented recession throughout the world in the steel industry. It has a capacity of approximately 27 million tons, but it is running at only 17 million tons a year. The expansion programme must go ahead to meet all the points made by my hon. Friend. We want to be in the position where the British Steel Corporation alone, by the early 1980s, will be producing approximately 37 million tons of steel. We must get all the other factors right. We must get the pricing policy, the productivity within the industry and 515 the capital structure of the industry right.
§ Mr. Peter Walker
The Minister has made an announcement concerning Scotland and presumably will be making others relating to Wales and England. When he has reached his decision, will he consider publishing a new White Paper with revised cost and production targets, thus bringing up to date the White Paper of 1973?
§ Mr. Varley
I cannot assure the right hon. Gentleman that we shall publish another White Paper. I shall try to supply as much information as possible. The right hon. Gentleman has slightly misrepresented the position. No doubt he will recall that a major statement on the review was made on 4th February by my right hon. Friend the Secretary of State for Energy. We must now settle the Hartlepools and Consett mills aspect, the Shotton problem and the further developments to Port Talbot.
§ Mr. Tinn
Will my right hon. Friend give any further information about the proposed plate mill development at Redcar and any possible closures that might be relevant or associated with it? Will he bear in mind that Teesside has already lost over recent years more steel jobs than are threatened in any other parts of the country, including Scotland and Wales? Does he agree that presently unemployed steelworkers on Teesside deserve at least as much consideration as potentially threatened steelworkers elsewhere?
§ Mr. Varley
I have the maximum sympathy for what my hon. Friend said. We are concerned about steel making throughout the length and breadth of the United Kingdom but I am sure that my hon. Friend will be the first to acknowledge that on Teesside and in the North-East there will be a major expansion which will be of general benefit to the area.
§ Mr. Michael Marshall
Does the Secretary of State agree that, however one might dress the figures in this instance, it is part of the ongoing and real problem of the closure of open-hearth facilities and of primary rolling which stems from the 1973 White Paper? This is a very serious problem and a natural extension of nationalisation and rationali- 516 sation. Will he take the opportunity of assuring the House that the Government will not seek to spread their hand to the independent special steel-making sector?
§ Mr. Varley
I want to see an expanding British steel industry in public ownership. I reject the hon. Gentleman's claim that some of the present problems have arisen because of public ownership. The position is nothing of the kind. When we consider the history of nationalised steel since 1967, we discover that the British Steel Corporation has done a remarkable job. The 14 companies, which were all in a state of under-investment, have reached the stage where there is in real prospect a profitable and expanding steel industry which will be able to take advantage of the upturn in the economy when it takes place.
§ Mr. Wrigglesworth
My right hon. Friend has mentioned the development on Teesside. Will he assure the House that the announcement he has made today, and any subsequent announcements, will not lead to any delays in the development of the complex on Teesside, or any cut-back in the final capacity that has been planned by the British Steel Corporation?
§ Mr. Varley
I am anxious that the programme should get ahead as quickly as possible. Much work has been done and a great deal of credit must go to Lord Beswick for the work he has done. I hope that the plans now laid and the other necessary decisions will be dealt with as speedily as possible.
§ Mr. Hardy
Is my right hon. Friend aware that the people of South Yorkshire believe that it is right to pay proper concern to Scotland? Can my right hon. Friend offer at an early date reassuring comments about the future of the Templeborough plant? Will the increased are plant development in Scotland increase the scrap problems in South Yorkshire?
§ Mr. Varley
I do not believe that the scrap problem will be exacerbated. On the question of the Templeborough works, the best thing I can do is to write to my hon. Friend.
§ Mr. Dempsey
Will my right hon. Friend accept the most grateful thanks of 517 the people of Airdrie for his announcement that they are to have 550 new jobs? Airdrie has one of the highest unemployment records in Scotland. Will my right hon. Friend believe me when I say that this news will be warmly welcomed and applauded by my constituents? Will he also accept that we are most grateful that great tribute is being paid to the excellent pool of labour that we have for meeting an expansion of this nature?
§ Mr. Varley
I thank my hon. Friend for his comments. I am sure that his view will be reflected by the majority of people in Scotland in direct contrast to the view expressed by the hon. Member for Aberdeenshire, East (Mr. Henderson).
§ Mr. Loyden
Will my right hon. Friend take into account that the adage that no news is good news will not be applicable to the Shotton situation? Will he also take into account that unemployment on Merseyside will be directly affected by the Shotton situation and the possibility of the closure of Birkenhead docks because of the loss of ore revenue? These matters concern people on Merseyside, particularly as one person in eight in that area is unemployed. I accept that at this stage the Shotton question has been shelved again. However, I urge my right hon. Friend not to make any further statements relating to Shotton unless they are made in this House and that nothing should be done during the recess. Will he assure us that such a statement, when made, will be made in the House?
§ Mr. Varley
I can give my hon. Friend the assurance that a statement will not be made in the recess regarding Shotton. When a statement is eventually made it will be made to this House. We are not in a position to make a statement about Shotton today because we are taking into consideration all the factors mentioned by my hon. Friend.
§ Following is the report:
§ REVIEW OF STEEL CLOSURES IN SCOTLAND, REPORT BY LORD BESWICK, MINISTER OF STATE, DEPARTMENT OF INDUSTRY.
§ My Interim Report on the review of the British Steel Corporation's proposed closures of steel plants was published on 4th February. The Report noted that I still had to complete my review of the proposed closures in Scotland and of the closures of the Hartlepool and Con- 518 sett plate mills consequential on the BSC's proposal to build a new plate mill at Redcar. I considered also that further study was needed of the economies of modernised steelmaking at Shotton and its implications for BSC's proposals elsewhere.
§ 2. I have now completed the review of the proposed closures in Scotland and my conclusions are being announced immediately so as to reduce the present uncertainty. Consideration of the proposed closures at Shotton is not covered here. Consideration of the closures of the Hartlepool and Consett plate mills, which are associated with the proposed plate mill at Redcar is awaiting completion of the discussions between the BSC and the workforces at Hartlepool and Consett on alternative proposals which would preserve the future of their mills.
§ 3. I first visited all the plants concerned in Scotland to get a feel of the situation. I then held formal tripartite discussions with the BSC and the TUC Steel Committee. I have also had several meetings with the Scottish TUC, including one during the Prime Minister's visit to Glasgow on 27th February and I have met the constituency MPs affected. As elsewhere I have been immensely impressed by the positive and constructive attitude of management, trade unions and workers at all levels. The Minister of State, Scottish Office, has been closely involved at all stages and agrees with my recommendations.
§ 4. Because of the close interconnection which exists between the Corporation's plants in Scot land, I have had to consider not only the individual closure proposals but also how those proposals or variants on them would affect the Corporation's wider plans for developments in Scottish steelmaking. Arising from my review, the Corporation have revised their proposals for closures and have come forward with fresh proposals for new investment. I welcome these changes and recommend their acceptance. I deal first with the proposed closures. A table showing the number of jobs involved and sum marising the recommendations is annexed.
§ ORE HANDLING
§ General Terminus Quay
§ 5. I recommend that the closure should be confirmed in view of the development of the much larger and more efficient Hunterston ore terminal.
§ Clyde Iron
§ 6. There is in my view no alternative to the ultimate closure of the Clyde Iron works once the open hearth furnaces (see paras, 7–8 below) have closed and adequate new supplies of iron are available in Scotland. The BSC have agreed that the final closure date will not be before 1st January 1980 and they will ensure that the closure is managed in an orderly way so as to maximise the opportunities for the employees affected to obtain alternative jobs. The eventual closure will also facilitate the Government's plans for general industrial development in the Cambuslang recovery area, inter alia, by removing a source of pollution.519
§ OPEN HEARTH STEELMAKING
§ 7. I have concluded that the BSC have made out their case for closing open hearth steel-making at Clydebridge, Dalzell, Lanarkshire, Ravenscraig and Glengarnock once alternative supplies of steel for the related product mills have become available from more modern and efficient plant in the area. The submerged injection process as proposed by the workers at Clydebridge would not improve the economics of the open hearth process sufficient to justify its retention there.
§ 8. However, following the review, the BSC propose to close these works later than originally intended. The position is as follows:
|Date initially proposed for closure||Deferred date now proposed|
|Clydebridge||1976–77||July 1977–January 1978|
|Dalzell||1976–77||July 1977–January 1978|
|Ravenscraig||1977–78||July 1977–January 1978|
|Lanarkshire||1977 or earlier||July 1977–January 1978|
|Glengarnock||Not before 1978–79||Not before 1st January 1980|
§ PRIMARY ROLLING
§ 9. I consider that the BSC have made out their case for the closure of the Clydebridge slabbing mill in view of the proposed installation of a third slab caster at Ravenscraig. Similarly, primary rolling at Glengarnock will have to cease once blooms are available from new capacity elsewhere.
§ PRODUCT MILLS
§ 10. I accept that the Dalzell light section mill and bar mill will have to close with the closure of the Dalzell open hearth plant, i.e. in the period July 1977–January 1978.
§ Hallside Billet Mill/Craigneuk Bar Mill
§ 11. I have been impressed by the arguments advanced by local MPs, local authorities, trade unions and the workers themselves for the retention of these "special steel" facilities which the BSC had proposed to close in 1976–77. The BSC have reconsidered their position and now propose to keep these mills in operation into the 1980s. The Corporation will undertake the necessary capital expenditure (estimated roughly at £1 million) to secure the best performance from these mills, obsolescent 520 as they are in some respects. The BSC have also undertaken to increase the capacity of the electric are furnace at Hallside to about 250,000 tonnes a year so as to maintain supplies from the Hallside billet mill to the Craigneuk bar mills as well as steel for other mills in Scotland as desired. All this will retain an identifiable special steel facility in Scotland into the 1980s.
§ 12. Following my discussions, the BSC are reviewing the potential market for the products of this small iron foundry. Therefore, the closure of the foundry should not be confirmed now. When their review of the market is completed, the Corporation will discuss the future of the foundry with the Unions through the normal procedures.
§ 13. I welcome the BSC's proposals for the redevelopment and expansion of the Craigneuk steel foundry; this is in line with the Government's policy for the ferrous foundry industries as incorporated in the new scheme for financial assistance under Section 8 of the Industry Act 1972 (for which the BSC will be eligible). For the new investment at Craigneuk to succeed, I have found no alternative to BSC's proposal to concentrate the Craigneuk and Tollcross operations on the Craigneuk site. I recommend therefore that the closure of the Tollcross steel foundry be confirmed. The Corporation have undertaken that, in recruiting for the new 300 job opportunities arising from the development at Craigneuk, preference will be given to the workers from Tollcross, half of whom live between Tollcross and Craigneuk which are less than 10 miles apart. This will, inter alia, retain within the Corporation people with the special skills of foundry work.
§ NEW INVESTMENT PROPOSALS
§ Direct Reduction Plants at Hunterston
§ 14. Following the announcement last year of the Corporation's intention to build a plant at Hunterston for the manufacture of iron by the direct reduction process, the Corporation have now decided to proceed with the construction of two 400,000 tonne units there; the total investment in both plants is estimated at £55 million (at current prices), providing about 150 jobs from 1978; priority in filling these jobs will be given to workers becoming redundant from steel plants affected by closure.
§ NEW STEELMAKING PLANT
§ 15. The Corporation, like the Government, are committed to a target of 4½ million tonnes of steel capacity in Scotland by the early 1980s, including up to a million tonnes of new electric are capacity. I have carefully considered the many representations made to me that 3.2 million tonnes is too optimistic a target for output from the expanded plant at Ravenscraig. I am very conscious of the need for new plant in Britain to match up to the efficiency of similar plant overseas if we are to have an internationally competitive steel 521 industry in the 1980s; there is a responsibility on both management and workers to cooperate in achieving this. However, whilst the Corporation must continue to aim at an output of 3.2 million tonnes at Ravenscraig, it would be more prudent to use a figure of 3 million tonnes when assessing supplies to the product mills in Scotland.
§ 16. The Corporation have not hitherto determined where they wish to locate new electric are capacity and various sites for this were suggested to me by MPs, local authorities and workers' representatives as a way of mitigating the social effects of the proposed closures and of providing a more secure supply of steel for Scottish product mills. I have discussed these proposals with the Corporation. The Corporation now propose to build an electric are plant at Hunterston of about 250,000 tonnes capacity which will produce continuously cast blooms for rolling at Glengarnock. This would, inter alia, provide evidence of their intention progressively to develop the Hunterston site. The closure of the open hearth furnaces and primary rolling at Glengarnock will be phased to the availability of steel from Hunterston. The cost of the new electric are and continuous casting plants is estimated at £35–£40 million at current prices, providing about 280 new jobs.
§ 17. The Corporation are also prepared to uprate the capacity of the electric are furnace at Hallside from 150,000 tonnes to about 250,000 tonnes at a cost of £1 to £2 million (see paragraph 11 above).
§ 18. I also concluded that there are good reasons for constructing a new electric are plant in the Motherwell area inter alia to help offset the social effects of the closures of the open hearth furnaces. Following our discussions, the Corporation propose to build a new electric are plant of about 250,000 tonnes capacity at Ravenscraig. They consider this the most suitable site in the Motherwell area as the plant would be well integrated with other facilities at Ravenscraig and would still have ready access to the Dalzell and Lanarkshire product mills. The cost of this plant is estimated at up to £20 million and it should provide an additional 50 jobs in the Motherwell area.
§ 19. These developments will provide an additional 600,000 tonnes of electric are capacity in Scotland, bringing BSC's steel capacity in Scotland to 4.2 million tonnes, easily maintaining the Scottish share of BSC's steel production in the United Kingdom. I have agreed with the Corporation that it is premature to consider at this stage where the balance of electric are capacity in Scotland should be sited This can best be examined in the light of production and market development over the next few years.
§ PIPE PRODUCTION
§ 20. The Corporation propose to expand their capacity for producing threaded pipe for the casing of oil and gas wells by new investment of £25 million at Clydesdale works near Motherwell and at Imperial Works in Coatbridge. This will provide 550 new job opportunities at Imperial but a reduction of about 100 job opportunities at Clydesdale, i.e. 522 a net gain of about 450 jobs. It will yield a better balanced and more economic operation and will enable the Corporation to continue to supply the major proportion of the North Sea market for casing.
§ EFFECT ON JOBS
§ 21. The White Paper of February 1973 on BSC's 10 year Development Strategy gave a net reduction of about 6,500 jobs in Scotland over the period of the strategy. The Corporation subsequently predicted a gross loss in job opportunities (including Clyde Iron and Glengarnock open hearths) of about 7,000 to be partially offset by 2,400 new job opportunities, giving a net job loss of about 4,600. My recommendations would result in the saving of 1,350 jobs and the deferment of most of the remaining job losses by 1 or 2 years. The Corporation's proposals for new investment provide for 3,525 new jobs, thereby reducing the net job loss to about 2,100.
§ 22. These losses are inevitable if we are to phase out obsolescent processes for steelmaking and provide a modern and thriving steel industry in Scotland giving secure employment to those remaining in the industry. The success of that industry will hinge on its ability to supply steel to using industries both at home and abroad, at internationally competitive prices and qualities. This in turn will require steel plants—whether already in existence, now being built or newly planned following the review—to be run in accordance with international standards of operational practice and manning: otherwise the prospects for British steel, including Scottish steel, remaining competitive in the 1980s may be grim.
§ ALTERNATIVE EMPLOYMENT
§ 23. As noted in my Interim Report (paragraph 16), it is the policy of the Government to ensure that everything possible is done to provide alternative employment in areas affected by closures. During my visits to plants in Scotland proposed for closure, I assured the workers concerned that certainly no less would be done for them than we undertook to do in the case of closures in England and Wales confirmed in my Interim Report. However, it is difficult to provide for alternative employment while uncertainty exists as to whether a closure will take place and if so, when.
§ 24. The redundancies in the steel industry must be taken in the context of the general employment situation in West Central Scotland. The Government's efforts, therefore, must be directed at maintaining and enhancing the attack on the industrial and environmental problems of the region as a whole. The areas affected by the steel closures are all closely linked and all, with the exception of Glengarnock, within the Scottish Special Development Area. The full range of regional policies is already brought to bear to attract new employment. There has been some success in the past—between 1959 and 1973, mobile industry created some 35,000 new jobs in Scotland; nearly 8,000 further jobs are in prospect. The slowing down in the creation of new employment recently has been largely due to the general economic situation.523
§ 25. BSC is already pursuing a number of policies aimed at attracting new industry to the area. The Cambuslang project, announced by the Minister of State at the Scottish Office on 30th June provides a good example of
|Proposed Closure||Number of Lost Job Opportunities||Original Date of Closure||Recommendation|
|General Terminus Quay||60||1974–75||BSC proposal agreed.|
|Clyde Iron Works||1,220||1978–79 or later||Closure deferred until 1st January 1980 at earliest.|
|Clydebridge (OH Furnace, Primary Mill).||1,000||1976–77||Closure deferred until July 1977–January 1978.|
|Dalzell (OH Furnace, Primary/Bar and Section Mills).||1,030||1976–77||Closure deferred until July 1977–January 1978.|
|Lanarkshire (OH)||390||1977 or earlier||Closure not until July 1977–January 1978.|
|Ravenscraig (OH)||460||1977–78||Closure during July 1977–January 1978.|
|Hallside (Primary and Billet Mills).||450||1976–77||Plant to be retained into 1980s.|
|Craigneuk (Bar Mills)||800||1976–77||Plant to be retained into 1980s.|
|Clydesdale (OH)||600||1975–76||BSC proposal agreed; already replaced by new electric arc.|
|Glengarnock (OH Furnace and Blooming Mill).||530||1978–79 or later||Closure deferred until not before 1st January 1980, dependent on steel from Hunterston electric arc.|
|Tollcross (Foundry)||350||1975–76||BSC proposal agreed because of expansion of Craigneuk and job availability there.|
|Hamilton Foundry||100||1977–78||Closure not confirmed pending outcome of market survey.|
|Number of lost job opportunities as initially proposed||…||…||6,990|
|Less Hallside/Craigneuk Mills and Hamilton Foundry||…||…||1,350|
|Number of lost job opportunities now agreed||…||…||5,640|
|New Investments||New Job Opportunities|
|Direct Reduction Plants||…||…||…||…||…||…||150|
|Hallside Electric are Expansion||…||…||…||…||…||…||Negligible|
|Clydesdale Electric Arc||…||…||…||…||…||…||400|
|Clydesdale/Imperial Tubes.||…||…||…||…||…||…||450 (net)|
|Therefore, net job losses = 5,640 less 3,525|